I have seen the movie. Two-Face dies for sure. After his fall, he shown not breathing and just lies there still with both his eyes wide open. They even turn his head and he dosnt even buldge. Hes dead. They show his funeral briefly too.

And no Mike Engel character is totally a waste. He's shown on the news like two times, but only for a few seconds both times. He does not die either. He's one of the hostages in the end of the movie that Batman saves......and there is NO villain set up.